Revenue for the third quarter of 2016 was $157.2 million, compared to
$167.6 million for the same period last year.

GAAP gross margin was 46.9% for the third quarter, compared to a GAAP
negative gross margin of 47.7% for the same period last year.

Non-GAAP gross margin was 54.0% for the third quarter, compared to
50.8% for the same period last year.

GAAP operating loss for the third quarter was $19.4 million, compared
to a loss of $931.3 million for the same period last year.

Non-GAAP operating income for the third quarter was $3.3 million,
compared to non-GAAP operating loss of $10.0 million for the same
period last year.

GAAP net loss for the third quarter was $20.8 million, or ($0.40) per
diluted share, compared to a loss of $901.3 million, or ($17.35) per
diluted share, for the same period last year.

Non-GAAP net income for the third quarter was $0.1 million, or $0.00
per diluted share, compared to Non-GAAP net income of $0.7 million, or
$0.01 per diluted share, reported for the same period last year.

The Company maintains $239.3 million in cash and cash equivalents as
of the end of the third quarter.

Net R&D expenses for the third quarter amounted to $24.0 million,
representing 15.3% of net sales.

GAAP EBITDA for the third quarter amounted to $3.5 million.

Non-GAAP EBITDA for the third quarter amounted to $12.0 million.

Recent Business Highlights:

Announced that leading aircraft manufacturer Airbus is standardizing
on ULTEM™ 9085 3D printing material for the production of flight parts
for its A350 XWB aircraft.

MakerBot Print and Mobile software applications, which are
designed to help professionals integrate MakerBot solutions into
their workflows; and help educators introduce students to 3D
printing.

Thingiverse Education, designed to provide educators with access
to valuable classroom content created by other educators.

"The introductions of the Stratasys Infinite-Build and Robotic Composite
3D Demonstrators both evidence the unique long-term value of our core
technologies and highlight the importance of strategic relationships in
developing solutions that target specific, high-value added
applications," said Ilan Levin, Chief Executive Officer of Stratasys.
"These innovations demonstrate our potential to meet the needs of
customers by leveraging our core assets within key vertical markets. We
believe these types of opportunities remain significant across multiple
industries, and we are committed to seeking their further development."

Financial Guidance:

Stratasys provided updated guidance regarding the Company's prospective
revenue and net income (loss) for the fiscal year ending December 31,
2016:

Revenue guidance of $662 to $673 million.

GAAP net loss of $76 to $71 million, or ($1.44) to ($1.35) per diluted
share.

Non-GAAP net income of $7 to $11 million, or $0.13 to $0.21 per
diluted share.

Non-GAAP Tax expense of $15 to $17 million, which includes the
negative impact of the planned accounting treatment for tax valuation
allowance.

Capital expenditures are projected at $50 to $60 million.

Given the expected ongoing negative impact of not recording a tax
benefit on U.S. tax losses on the Company non-GAAP net income, the
Company believes that the rate of growth in its non-GAAP operating
income will be the best measure of performance.

Non-GAAP earnings guidance excludes $59.0 million of projected
amortization of intangible assets; $21.0 million of share-based
compensation expense; $10.0 to $11.0 million in merger and acquisition
related expense; and $7.0 to $8.0 million in reorganization and other
related costs; and includes $15.0 million in tax expenses related to
non-GAAP adjustments.

"We were pleased to recognize additional improvements to our operational
efficiency during the period which was reflected in a reduction in
non-GAAP operating expenses and increase in our non-GAAP gross margin
compared to the same period last year," continued Levin. "We will
continue to seek further improvements in our cost structure as we strive
to align our operations even more closely with our anticipated results."

Stratasys Ltd. Q3 2016 Conference Call Details

The Company plans to hold the conference call to discuss its third
quarter financial results on Tuesday, November 15, 2016 at 7:00 a.m.
(ET).

To participate by telephone, the domestic dial-in number is (855)
319-2216 and the international dial-in is (503) 343-6033. The access
code is 96601880.

Investors are advised to dial into the call at least ten minutes prior
to the call to register. The webcast will be available for 90 days on
the "Investors" page of the Stratasys Web site or by accessing the
provided web address.

For more than 25 years,Stratasys
Ltd. (NASDAQ:SSYS) has been a defining force and dominant
player in 3D printing and additive manufacturing - shaping the way
things are made. Headquartered in Minneapolis, Minnesota and Rehovot,
Israel, the company empowers customers across a broad range of vertical
markets by enabling new paradigms for design and manufacturing. The
company's solutions provide customers with unmatched design freedom and
manufacturing flexibility - reducing time-to-market and lowering
development costs, while improving designs and communications. Stratasys
subsidiaries include MakerBot and Solidscape, and the Stratasys
ecosystem includes 3D printers for prototyping and production; a wide
range of 3D printing materials; parts on-demand via Stratasys Direct
Manufacturing; strategic consulting and professional services; and the
Thingiverse and GrabCAD communities with over 2 million 3D printable
files for free designs. With more than 2,500 employees and 1,200 granted
or pending additive manufacturing patents, Stratasys has received more
than 30 technology and leadership awards. Visit us online at: www.stratasys.com
or http://blog.stratasys.com/,
and follow us on LinkedIn.

Stratasys is a registered trademark of Stratasys Ltd. and/or its
subsidiaries or affiliates.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and
the statements regarding its projected future financial performance,
including under the heading "Financial Guidance," are forward-looking
statements reflecting management's current expectations and beliefs.
These forward-looking statements are based on current information that
is, by its nature, subject to rapid and even abrupt change. Due to risks
and uncertainties associated with Stratasys' business, actual results
could differ materially from those projected or implied by these
forward-looking statements. These risks and uncertainties include, but
are not limited to: any failure to efficiently and successfully
integrate the operations of Stratasys, Inc. and Objet Ltd. after their
merger as well as MakerBot, Solid Concepts, Harvest and GrabCAD after
their acquisition or to successfully establish and execute effective
post-acquisition integration plans; changes in the overall global
economic environment; the impact of competition and new technologies;
changes in the general market, political and economic conditions in the
countries in which Stratasys operates; any underestimates in projected
capital expenditures and liquidity; changes in Stratasys' strategy;
changes in applicable government regulations and approvals; changes in
customers' budgeting priorities; lower than expected demand for
Stratasys' products and services; reduction in Stratasys' profitability
due to shifting in its product mix into lower margin products or
shifting in its revenues mix significantly towards its AM services
business; costs and potential liability relating to litigation and
regulatory proceedings; and those factors referred to in Item 3.D "Key
Information - Risk Factors", Item 4, "Information on the Company", and
Item 5, "Operating and Financial Review and Prospects" in Stratasys'
Annual Report for the year ended December 31, 2015, as well as in such
Annual Report generally. Readers are urged to carefully review and
consider the various disclosures made throughout (i) the Form 6-K
attaching Stratasys' unaudited, condensed consolidated financial
statements as of, and for the quarter and nine months ended, September
30, 2016, and its review of its results of operations and financial
condition for those periods, which has been furnished to the Securities
and Exchange Commission, or SEC, on or about the date hereof, (ii)
Stratasys' 2015 Annual Report, and (iii) Stratasys' other reports filed
with or furnished to the SEC, which are designed to advise interested
parties of the risks and factors that may affect its business, financial
condition, results of operations and prospects. Any guidance and other
forward-looking statements in this press release are made as of the date
hereof, and Stratasys undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.

Use of non-GAAP financial measures

The non-GAAP data included herein, which exclude certain items as
described herein, are non-GAAP financial measures. Our management
believes that these non-GAAP financial measures are useful information
for investors and shareholders of our company in gauging our results of
operations (x) on an ongoing basis after excluding merger and
acquisition related expense and reorganization-related charges, and (y)
excluding non-cash items such as stock-based compensation expenses,
acquired intangible assets amortization, impairment of goodwill and
other long-lived assets, changes in fair value of obligations in
connection with acquisitions and the corresponding tax effect of those
items, as well as, non-recurring changes of non-cash valuation allowance
on deferred tax assets. These non-GAAP adjustments either do not reflect
actual cash outlays that impact our liquidity and our financial
condition or have a non-recurring impact on the income statement, as
assessed by management. These non-GAAP financial measures are presented
to permit investors to more fully understand how management assesses our
performance for internal planning and forecasting purposes. The
limitations of using these non-GAAP financial measures as performance
measures are that they provide a view of our results of operations
without including all items indicated above during a period, which may
not provide a comparable view of our performance to other companies in
our industry. Investors and other readers should consider non-GAAP
measures only as supplements to, not as substitutes for or as superior
measures to, the measures of financial performance prepared in
accordance with U.S. GAAP. Reconciliation between results on a GAAP and
non-GAAP basis is provided in a table below.